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Checks and Payment Methods. Chapter 17-3. Opening a Checking Account. Convenient Safe Proof of payment Record for financial management. The First Deposit. Two or more people have account together – joint account When you deposit money into account use a deposit slip.

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opening a checking account
Opening a Checking Account
  • Convenient
  • Safe
  • Proof of payment
  • Record for financial management
the first deposit
The First Deposit
  • Two or more people have account together – joint account
  • When you deposit money into account use a deposit slip
what is an endorsement
What is an Endorsement
  • An endorsement is written evidence that you received payment or that you transferred the right to receive payment
  • Involves signing your name on the back of the left end of the check
types of endorsements
Types of Endorsements
  • Blank endorsement
  • consists of only the endorser’s name.
  • Sign your name in ink exactly as it is written on the face of the check
  • Makes the check payable to anyone who has the check
types of endorsements1
Types of Endorsements
  • Full endorsement or Special
  • Allows you to transfer an check to another person
  • You write the words “Pay to the order of …..”
  • This is followed by your signature
types of endorsements2
Types of Endorsements
  • Restrictive Endorsement
  • Limits the use of the check to the purpose given in the endorsement
  • “For Deposit Only” above your signature
  • Restricts the use of the check to only being deposited in your account
using a checking account
Using a Checking Account
  • All check contain essentially the same information
  • Drawer is the owner of the account who signs the front of the check
  • Payee is the person to whom the check is written
  • Drawee is the bank or other financial institution that pays the check
check register
Check Register
  • A place to record the account activities
  • Check stub is a form attached to the check by a perforated line
  • Check register is a separate book
  • Duplicate copy of check may also be automatically created when you write the check

*Always fill out stub or register first then write the check

writing a check
Writing a Check
  • Write checks in order by number so you know which checks have been paid
  • Write the date in the proper space
  • Write the payee’s name on the line following “Pay to the Order of “
  • Write the amount of the check in figures after the printed $ (Write the amount close to the $ to prevent someone from altering the check and write the cents close to the dollar figures)
writing a check cont
Writing a Check cont.
  • Write the dollar amount in words on the line below the payee’s name
  • Write cents in figures as a fraction of a dollar example: 25/100 is 25¢
  • Begin writing at the far left end of the line and draw a line from the fraction to the printed “Dollars” to fill all unused space
  • Write the purpose on the line at the bottom of the check
  • Sign the check!!!!!
proper check writing
Proper Check Writing
  • Write checks only on the forms provided by the bank
  • Write checks in ink
  • Only write checks if money is available. Writing checks for more than that will cause an overdrawn account.
  • Use current date. A postdated check is one that is dated later than the date on which it is written
proper check writing cont
Proper Check Writing cont.
  • Avoid making checks payable to cash or bearer
  • Always fill in the amount
  • Void checks on which you make errors. Do not try to erase or retrace your writing
  • Record every payment from your checking account
stopping payment
Stopping Payment
  • A written notice that tells the bank not to pay a certain check.
  • Because banks charge a high fee for stopping payment on a check, use only for good reason.
reconciliation process
Reconciliation Process
  • At regular intervals, usually monthly, the bank will send you a report on the status of your account know as a bank statement.
  • Bank statement includes:
  • Balance at the beginning of the month
  • Deposits made
  • Checks paid by the bank
  • ATM transactions
  • EFTs
  • Service charges
  • Interest earned
  • Ending balance
reconciliation process1
Reconciliation Process
  • The balance per your records with most likely not agree with the banks balance
  • Some check you have written have not cleared (been paid). These checks are known as outstanding checks.
  • You may have forgotten to record ATM transactions
  • Service charges
  • Deposit not reach bank yet
  • interest
types of payments
Types of Payments
  • Certified Checks – a personal check for which a bank has guaranteed payment
  • Cashier’s Check – a check that a bank draws on its own funds.
  • Traveler’s checks –special form designed for making payments when you are away
  • Money Order – a form of payment that orders the issuing agency to pay the amount printed on the form to another party.